Finkel review: mixed news for consumers

Electricity transmission tower against blurry sky.

The highly anticipated Finkel review into the security of the national electricity market is a mixed bag for consumers, with price-reducing and security-enhancing initiatives tempered by some ideas that appear short-sighted and will cost consumers more, according to Craig Memery, Team Leader at PIAC’s Energy + Water Consumers’ Advocacy Program.

‘While the recommendations of today’s final report will certainly improve the long-term reliability and security of the system, and go some way to reducing emissions, they shirk some of the more cost effective ways of doing so, meaning consumers will pay more than they should in the long run,’ said Mr Memery.

‘On the upside, we welcome Dr Finkel’s  acknowledgement of the critical role that demand response plays in a modern energy system, as an alternative to building more generators to meet our  energy needs.

‘The review offers sound recommendations to improve planning and transparency, but other recommendations fall short of cost-effectively future-proofing the energy system.

‘Requiring new renewable energy operators to invest in energy storage technologies or come up with other ways of addressing their variable output is expensive and unnecessary,’ said Mr Memery.

‘There are already measures in train that will improve integration of renewable energy sources, like wind and solar, into the grid. These include changes to manage system security and reliability and provide better price signals to generators and batteries.

‘Placing additional obligations on renewable energy generators runs the risk of using less cost-efficient approaches, which translates to higher costs for consumers.

‘PIAC is particularly concerned that there is little acknowledgment of the serious problem of existing gas generation businesses gaming the energy market.  They do this by withdrawing generators from the market to increase the spot price received by other generators that they own, a practice that causes higher prices for consumers and, potentially, rolling blackouts.

‘We are also troubled by the recommendation that coal-fired power stations be required to give three years notice before they shut down. This raises the very real prospect of compensation payments to aging or redundant generators, that require extensive maintenance to keep running and might not even be needed. Such compensation would come from taxpayers or consumers – households would be hit either way,’ said Craig Memery.

MEDIA CONTACTS: Media and Communications Manager, Gemma Pearce: 0478 739 280 or EWCAP Team Leader, Craig Memery: 0412 223 203.

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